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To: SKIP PAUL who wrote (25412)	3/28/1999 5:01:00 PM
From: kech	Respond to of 152472

Skip Paul - Don't forget marketing advantages and market share. Skip you ask why would they risk "profitability and growth" on a hair brained scheme to fool their customers. Why have they done it so far? Further, why would they want to retain the fiction of a "W-CDMA" mode at all? One problem here is that the terms CDMA2000 and W-CDMA are already out of date. They will both change and move toward convergence as we go forward. But keep in mind that ERICY really wants to keep the W-CDMA fiction alive. Is it for technical advantages? Of course not! It is to preserve the advantages of what they currently have in spades - market share and GSM precedent. Keep in mind this doesn't hurt Q as much as others - which is probably why the Q agreed to it. What it tries to do is to shut out LU and MOT and others on the European upgrade to ??CDMA ?? - that is whatever we want to call the new form of ERICY's CDMA which is basically the Q's CDMA with a different front end. This is why we have also heard recently about LU developing W-CDMA equipment. It seems like it makes excellent economic sense to do it if ERICY can do it. You ask, "Customers are smart enough to figure out the right answer". If you already spent $300 million for an ERICY system wouldn't you want them to shepherd your upgrade? This is what ERICY is counting on. And I think they are doing their best to keep the fingers of LU and Mot, and maybe even ALA and Nokia, out of the game. Most operators understood the game before. But those with ERICY installed GSM equipment are more inclined to understand the game as "half full" for ERICY. If ERICY has a shot at the rest, all the better for them. When you say the "rest of the world is ready" to build 3G systems and get on with it instead of waiting - I guess I have another point of departure. The world doesn't really need 3G. This is a fiction largely perpuated by Ericsson in order to get GSM providers not to adopt CDMA. The CDMA operators can do HDR and do just fine with CDMAOne. GSM may be in more of a jam - not so much for data alone but just for plain old voice capacity - at least in the next year or two. I haven't heard any complaints that the Nokia 8100 can't do data(phone and computer combined which will compete with Q's PDQ- I may have the Nokia number wrong). But if ERICY is promising W-CDMA as an alternative to CDMA, and now they have the guarantee that it is doable, GSM providers will patch together enough capacity to survive until W-CDMA is ready. Hope I'm wrong and maybe I just can't give up being suspicious of ERICY, but I don't see them pitching for CDMAOne and CDMA2000 unless coerced. Particularly when they can divide the market and push their W-CDMA. Again, this isn't that bad for the Q, which is probably why Irwin Jacobs agreed to it, but it just means there won't be a chorus pushing for CDMA solutions right away. ERICY will drag their feet as usual and talk about how great W-CDMA will be (not CDMAOne and certainly not CDMA2000 or whtever Q's version will be in the tri-mode solution being negotiated). Besides, they might even sell some more GSM systems for capacity constrained GSM in the meantime. Again, I haven't heard the conference call so I may be missing something but it seems like ERICY's positin on keeping the fiction of W-CDMA alive means they are just escalating the same fight to another level. Diplomacy is war by other means. Tom

To: SKIP PAUL who wrote (25412)	3/28/1999 5:16:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 152472

If ERICY does what you are suggesting it would be quite irrational and they will be back on the path of self destruction. Ericsson now has a clear path to profitability and growth with CDMAone and CDMA2000 why would they risk that on a hair brained scheme to fool their customers? Customers are smart enough to figure out the right answer. Are they? Then why did they go with W-CDMA in the first place? I've worked with customers and most of them are pretty easy to fool on intricate technical matters. Their expertise is in other areas. As for self-destruction caused by Ericsson 'fooling' their customers, remember how well Ericsson appeared to manipulate the press et al without ever appearing to be the source (this is of course speculation on our part, but ...)? Are they now going to play fair? Finally, remember that Ericsson may not even need to do much to push W-CDMA. It is already on a roll in Europe with most of the bidders for 3g spectrum having already declared for W-CDMA. Finally, remember that Ericsson is the leader in W-CDMA, but the johnny-come-lately in CDMAOne. Everything else being equal they would be fools not to push for W-CDMA where Qualcomm, Lucent and Motorola are disadvantaged. There are many things I think about Ericsson, but being fools isn't one of them. Clark

To: SKIP PAUL who wrote (25412)	3/28/1999 5:50:00 PM
From: kech	Respond to of 152472

Skip - It is not irrational for Ericy to protect its main asset, which is its market share in GSM, to drag its feet on the deployment of the CDMA2000 flavor and continue to promise the W-CDMA flavor of the next generation of CDMA. In fact it would be silly for it not to do so. That is what the whole argument has been about - ERICY's share in GSM vs. Qcom's technology. It has now bought the access to the technology, it has every reason to try to push W-CDMA so that it gets the lion's share of the upgrades and not LU, or MOt, or Nortel - and maybe not even ALcatel, Siemens, or Nokia. It would be quite irrational to do otherwise. The system provider game is the big game. The Q was just a mosquito there. It may be better off to be out of it - it didn't have the scale and influence. Since it is now only in the handset and royalty and ASIC business, the Q won't get hurt too badly, since it gets royalties of the W-CDMA flavor that gets deployed. But it would have been better off to get CDMA2000 deployed eventually and CDMAOne now since it has the chips etc ready for CDMAOne now and is in a stronger position to deliver CDMA2000 than it will have in W-CDMA. It is not about deceiving operators. If I had put in a $300 million system with ERICY I might be inclined to wait for its W-CDMA rather than CDMA2000. ERICY knows this and will try to take it to the bank.